UPDATE: Sterne Agee Initiates Ruckus Wireless at Outperform on Positive Trends

Sterne Agee initiated coverage on Ruckus Wireless

with an Outperform rating and a $23 price target. Sterne Agee noted, "We see several positive trends supporting our revenue projections (+29.5% in '13 and +24.4% in '14), including exploding mobile data usage, accelerating adoption of enterprise mobility (corporate-issued and BYOD), and overloaded 3G/4G cellular networks. Ruckus is particularly well positioned in the fastest growing WLAN segments, namely the underserved SMB (+20% CAGR '12-'16) and the capacity-constrained carrier market (+45.7% CAGR) where WiFi offloading is a big '13-'14 catalyst. While gross margin could be flattish as Ruckus's sales mix moves toward carriers, we see economies of scale driving strong operating leverage and supporting EPS growth from $0.17 in '13 to $0.28 in '14." Ruckus Wireless closed at $18.96 on Monday.